NATIONAL

• PLI Scheme for Textiles: Full List of Beneficiaries
• CEA pegs growth at 7-8.5% given global uncertainties
• Free Trade Agreement: India keeps 1,157 sensitive items out of UAE FTA ambit
• India, Germany discusses investment opportunities in MSME sector
• India: Australia-India Economic Agreement Raises Challenges for US-India Trade
• State pitches for mega textile park in Kadapa district
• GST revenue surge: Odisha, Karnataka, Maharashtra gain the most
• 70% of exporters’ payments stuck in Russia have come in
• Structural faultlines in trade numbers
• PC yarn prices gain up to ₹10/kg in north India's Ludhiana

INTERNATIONAL

• AJC study suggests ASEAN to participate more in RCEP GVCs
• Circular economy: MEPs want to reduce harmful chemicals in waste
• Turkiye trying to regain share in Saudi Arabia's apparel market

PLI Scheme for Textiles: Full List of Beneficiaries

We provide a full list of the 64 applicants that have been selected as beneficiaries under India’s PLI Scheme for Textiles – Part 1 and Part 2. The government approved the Production-Linked Incentive (PLI) Scheme for Textiles – focusing on manmade fiber (MMF) apparel, MMF fabrics, and products of technical textiles to enhance India’s manufacturing capabilities and exports. The scheme had an approved financial outlay of INR 106.83 billion over a five-year period. The notification for the scheme was issued on September 24, 2021. Operational Guidelines for the PLI Scheme were issued on December 28, 2021. List of applicants selected under the PLI Scheme for Textiles Applications under PLI Scheme for Textiles were received from January 1, 2022 to February 28, 2022. The scheme has two parts: Part 1, where minimum investment is INR 3 billion and minimum turnover required is INR 6 billion and Part 2, where minimum investment is INR 1 billion and minimum turnover required INR 2 billion. A total of 67 applications were received – 15 applications under Part 1 and 52 applications under Part 2. Initially, 61 applicants were announced as beneficiaries, but three more companies were added as of May 3, 2022. Total applications approved under Part 1 is now 14 and under Part 2 is 60. In the approved 64 applications so far, the proposed total investment is INR 197.98 billion and a projected turnover of INR 1.939 trillion with a proposed employment of 245,362. For the companies selected as eligible under the PLI scheme, see the table below.

Second edition of the PLI scheme expected The central government may update the PLI scheme for the textile industry with a second edition that is dedicated to apparel and garments and with lower investment criteria. The PLI Scheme for Textiles is projected to utilize a little more than INR 66 billion for current investors, as reported in the media.

Source: India Briefing

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CEA pegs growth at 7-8.5% given global uncertainties

So, the reality may in fact somewhere between this range of 7-8.5%. We will take that in the current circumstances because the uncertainty as to how long this current conflict in Europe will last and the impact it would have... is quite difficult to guess at this point," he said. Chief Economic Adviser V Anantha Nageswaran on Wednesday said India's growth is expected to be in the range of 7-8.5% given the global uncertainties. The International Monetary Fund recently lowered its growth forecast to 8.2% which is higher than 7.2% by the Reserve Bank. "The range of outcomes is fairly wide. Wider than it could ever be and that makes decision making all the more hazardous. Lots of luck is needed to get it right," he said at an event here. As per the Economic Survey, India's economy is expected to grow by 8-8.5% in the fiscal beginning April 1. The CEA said he had a conversation this afternoon with Fitch Ratings which has projected 8.5% growth for India. Although they have a negative outlook on India with BBB minus rating, they do have a forecast of 8.5% real GDP growth for 2022-23, he added. "So, the reality may in fact somewhere between this range of 7-8.5%. We will take that in the current circumstances because the uncertainty as to how long this current conflict in Europe will last and the impact it would have... is quite difficult to guess at this point," he said.

Source: Economic Times

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Free Trade Agreement: India keeps 1,157 sensitive items out of UAE FTA ambit

The Comprehensive Economic Partnership Agreement (CEPA) will likely benefit about $26 billion worth of Indian exports that were subjected to 5% duty by the UAE. India has kept as many as 1,157 sensitive products from key sectors, including dairy, automobiles, medical devices, consumer electronics and agriculture, out of the purview of its free trade agreement (FTA) with the UAE that came into force from May 1. According to FAQs prepared by the commerce ministry on the FTA, the products from the UAE that won’t be eligible for duty-free entry into India include all dairy items, most automobiles and components, fruit, cereals, sugar and food preparations, tobacco products, dyes and pigments, natural rubber, tyres, and processed marble, TVs, toys, footwear, instant coffee and petroleum waxes. Even gold jewellery beyond the annual quota of 2.5 tonnes will be subject to the regular customs duty of 20%. The Comprehensive Economic Partnership Agreement (CEPA) will likely benefit about $26 billion worth of Indian exports that were subjected to 5% duty by the UAE. FE had in March reported that New Delhi has kept several sensitive products, including dairy and farm items, out of the FTA’s ambit and that $26-billion worth Indian exports will stand to gain from the duty relief granted by Abu Dhabi under the FTA. The FTA also provides for stringent product-specific rules of origin, which requires substantial value addition (up to 40%) in the UAE for obtaining duty relief here. The certificate of origin will be issued by the ministry of economy of the UAE to avoid contravention of the rules of origin criteria. In certain cases, India has agreed on phased reduction of duties. For instance, New Delhi, which taxes bovine meat and chicken imports at 30%, will trim the duty to 27% in the first year of the FTA, followed by a phased reduction of 300 basis points each year until it reaches 15%. Buffalo meat alone contributed about $2.8 billion to India’s farm export kitty until January last fiscal. Of course, in some other meat segments where it’s not a big player, the duties will be abolished immediately.

Source: Financial Express

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India, Germany discusses investment opportunities in MSME sector

Jain and Jerger talked about cooperation in the MSME sector between India and Germany with special focus on the fields of food processing, textiles, manufacturing, AI and green energy. The Department for Promotion of Industry and Internal Trade (DPIIT) secretary Anurag Jain, who is part of the delegation accompanying Prime Minister Narendra Modi on his tour to Germany, met Markus Jerger, Chairman, BVMW (German Association for Small and Medium Enterprises) on Tuesday to discuss investment opportunities between the two countries. Jain and Jerger talked about cooperation in the MSME sector between India and Germany with special focus on the fields of food processing, textiles, manufacturing, artificial intelligence, technology, hydrogen and green energy, sustainability and digitalisation. Jain also chaired the round-table of German Small and Medium Enterprises in Berlin. Earlier this week, Modi and German Chancellor Olaf Scholz, had signed a Joint Declaration of Intent (JDI) to establish an agreement to have a direct encrypted connection between the Ministry of External Affairs (MEA) and German Foreign Office. Eight other pacts to push green energy, economic partnership and mobility were also signed on Monday.

Source: Economic Times

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India: Australia-India Economic Agreement Raises Challenges for US-India Trade

The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) (signed on April 2, 2022) is a partnership agreement that aims to boost bilateral trade and investment between the two Indo-Pacific countries. The agreement must now be approved by Australia’s and India’s parliaments, but little opposition is expected for the ratification agreement in either country. Through its phased-in tariff reductions, the AIECTA will raise challenges for U.S. food and agricultural products in the Indian market. Commodity areas of concern include wines and spirits, cotton, pulses and beans, forest products, and tree nuts (almonds and pistachios). At the same time, India is seeking to establish a number of additional free trade agreements and or comprehensive economic partnership agreements - including with the United Kingdom, Canada, and Israel, among others.

Source : USDA

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State pitches for mega textile park in Kadapa district

Informing that there are several textile parks like Brandix Apparel in Visakhapatnam and other textile parks in Guntur, Nellore, Anantapur, he appealed to the Centre to set up a textile park in AP. The Andhra Pradesh government has proposed to set up an integrated textile park in 1,186 acres of land in Kopparthy of Kadapa district under the PM Mega Integrated Textile Region and Apparel (MITRA) scheme. According to Special Chief Secretary (Industries) Karikal Valaven, the State government urged the Centre to set up the textile park either in the jurisdiction of Kopparthy node in Visakhapatnam-Chennai Industrial Corridor or in the Jagananna Mega Industrial Hub in Kadapa district. Participating in the national conference on PM MITRA parks in New Delhi on Wednesday, Valaven explained the facilities being provided by the AP Industrial Infrastructure Corporation (APIIC) in Kopparthy to meet industrial needs. The government extended all support and stood with the textile units by giving incentives during the Covid pandemic, he said and explained the Industry Policy 2020-23 and the special incentives announced by Chief Minister YS Jagan Mohan Reddy for the new units in Kopparthy. “AP is in 7th position in cotton production, the key material for the textile industry, and second place in silk production. A handloom training centre was established in Anantapur and the Indian Institute of Handloom Technology is located in Nellore. AP also is at the top in yarn production,” he added. Informing that there are several textile parks like Brandix Apparel in Visakhapatnam and other textile parks in Guntur, Nellore, Anantapur, he appealed to the Centre to set up a textile park in AP. APIIC MD J Subrahmanyam gave a presentation and explained the rail, road, airport and port connectivity to the two locations proposed by the AP government for setting up the textile park.

Central team to visit Kadapa A delegation of officials from the Centre, ed by Union Textiles department director HS Nanda, will visit Kadapa district on May 6 to inspect the possibilities of setting up the integrated textile park in Kopparthy under the PM MITRA Parks scheme.

Source: New Indian Express

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GST revenue surge: Odisha, Karnataka, Maharashtra gain the most

According to Deloitte India partner MS Mani: “Some of the states excessively relied on the 14% guaranteed revenue aid for the past five years and were lax in enforcing compliance, so, such states may have showed lower GST growth in recent months while others did well.” A continued momentum in the goods and services tax (GST) receipts from July 2021 onwards yielded an average mop-up of Rs 1.23 trillion in FY22, up 29% on year. Officials reckon that monthly GST revenues may average at Rs 1.35 trillion in FY23. In aggregate, all states reported 17.5% growth in GST revenues in nine months during July 2021-April 2022 (excluding January, for which granular data is not available), with some reporting much higher growth. Buoyant GST collections would mitigate the revenue shock to states from the expiry of the compensation mechanism in July this year. Of course, the states still needed compensation in FY22 because of the protected revenue (14% annual growth over FY16 base). The Centre borrowed Rs 1.1 trillion in FY21 and Rs 1.59 trillion in FY22 and released the funds to the states as designated cess pool for compensation shortfall. Also, GST revenues from imports has in these months been growing at almost double the pace at which the mopup from domestic transactions rose, reflecting the high imported inflation. An FE analysis of the nine months showed that 17 out of 30 states showed a GST collection growth of 15% or more. Odisha topped with a 39% growth on year, followed by Maharashtra (24%) and Karnataka (20%). Three large states — Tamil Nadu, Uttar Pradesh and Rajasthan — reported 12-13% growth in GST revenues in the period. Except three big states —Bihar, West Bengal and Madhya Pradesh — most other states that showed single-digit growth are smaller states like northeastern states and Goa. The top performers in GST revenue growth are largely manufacturing and miningactivity-dominated states while those lagging are largely consuming states. On the face of it, this is contrary to the assumption that GST being a destination-based consumption tax, consumer states benefit the most from it. “One plausible explanation could be consumption of services compared to goods may be lower in low income states like Bihar,” said NR Bhanumurthy, vice-chancellor of Bengaluru Dr BR Ambedkar School of Economics University. According to Deloitte India partner MS Mani: “Some of the states excessively relied on the 14% guaranteed revenue aid for the past five years and were lax in enforcing compliance, so, such states may have showed lower GST growth in recent months while others did well.” These states might resort to greater enforcement after the compensation period ends and would also benefit from GST buoyancy, he said. Both government officials and analysts reckon that GST buoyancy is due to a combination of factors such as strong anti-evasion measures by tallying GST payments of companies with income tax payments, tightening of rules to deny input tax credit to companies if they fail to ensure their vendors have filed their GST returns, higher commodity prices and rebound in economic activities after Covid subsided. Retail inflation averaged about 5.5% in FY22 and could be over 6% in FY23 going by the recent spike in prices due to rise in commodity prices such as fuels. The much-awaited restructuring of the GST slabs to raise the revenue-neutral rate (RNR) from a little over 11% now to 15.5% would commence gradually from the current financial year. This will further boost states’ revenues. More than hike in rates in the short term, the Council may consider further measures such as use of data analytics to tighten compliance to augment revenues. In an indication of increase in compliance, during April 2022, 1.06 crore GST returns in GSTR-3B (a self-declared summary GST return filed every month)were filed, 92 lakh returns filed during April 2021. The filing percentage for GSTR-1 (a monthly or quarterly return that should be filed by every registered GST taxpayer) in April 2022 was 83.11% as compared to 73.9% in April 2021.

Source: Financial Express

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70% of exporters’ payments stuck in Russia have come in

• Exporters had claimed that about $500 mn in payments were stuck after the war began in Feb As much as 70–80% of the payments for goods that were shipped to Russia before the Ukraine war have been coming in, a government official privy to the matter told Mint, comforting exporters. Exporters had claimed that about $500 million in payments were stuck after the war began in February. Stuck dues had become a pain point for Indian exporters, especially after Russia was cut off from the SWIFT payment gateway. A sharp jump in the rouble complicated matters. Some exporters did start getting their payments a few weeks into the war, but large payments remained stuck. In FY21 India’s exports to Russia stood at $2.6 billion, while imports were $5.5 billion. India had shipped phrama products worth $469 million and electrical machinery worthy $301 million to Russia. Earlier commerce secretary BVR Subrahmanyam had said that the rupee-ruble trade mechanism was discussed to help exporters recover dues. The Reserve Bank of India had clarified that though there was no platform to facilitate a rupee-ruble trade, this was being discussed with all the stakeholders. “The department of financial services (DFS) has told us that 70% to 80% of the stuck payments are back.This is only for commodities that had gone before the war broke. After the war, not many commodities were exported as shipping lines were not available," a commerce ministry official said. Exporters concurred that payments have started arriving, even as trade with Russia has come to a standstill. “The payment problems with Russia were never related to defaults. The payment mechanism was an issue. About two-thirds of the payments were received till around 10 days ago and the numbers have surged to 70% now," said Ajay Sahai, director-general of the Federation of Indian Export Organisations, the country’s apex body of exporters. Mint had earlier reported that Indian exporters had received close to $100 million out of the payments of $400-500 million that were stuck at the beginning of March. “There is a lack of clarity regarding export of products to Russia following the sanctions by western countries," said Sahai. Russian banks have said that exporter can export any product and the payment will be credited to their account, according to exporters. The sanctions by western countries cover everything except food, pharma and medical equipment, and the energy sector. “Unfortunately, Indian banks are not clear whether they will issue electronic bank realisation certificates, for sectors other than the exempted ones as there is no communication from the government to the bank on how to deal with exports of items that are not exempted. There have been cases where Indian banks have refused to issue eBRC in respect of transactions under sanctions," Sahai said. Recently, Russia’s largest retail company X5 group reached out to Indian suppliers to make up for shortages in food, textiles, and beauty products. However, exporters are unsure if they will be allowed to sell textiles and beauty products to Russia. Queries mailed to the department of commerce and the Russian Embassy remained unanswered till press time. A number of exporters told Mint that those shipping goods to Russia were not being uniformly given insurance cover, which is provided by the state-owned Export Credit Guarantee Corporation, compounding their problems.

Source: Live Mint

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Structural fault lines in trade numbers

The surge in imports of commodities where we have strong domestic presence indicates failure to exploit our own resources On the face of it, the numbers couldn’t be better. True, the gap between imports and exports widened, but that is to be expected in a growing economy. India exported $38.19 billion worth of merchandise goods in April 2022. This is nearly a fourth more than during the same month a year ago, when the economy was recovering from the first wave but just before the second wave of Covid hit. What’s more, the April numbers are more or less near the record $40.38 billion of exports achieved in March, the highest ever one-month figure till date. The financial year-end surge helped take overall merchandise exports in 2021-22 to an all-time high of $417.8 billion. On the other hand, imports are growing at an even faster clip, as demand picked up and most industries got back to pre-Covid levels of production. As a result, the trade deficit widened to $20.07 billion. For the 12 months up to April, the deficit in merchandise trade has crossed $200 billion. That is a bit of a concern, but as long as the trade deficit is matched by strong economic growth, it is actually a good thing. The US, for example, ran a trade deficit throughout the 19th Century — but massive capital investments and infrastructure development led to a booming economy, and the world’s highest per capita GDP by 1900, making it the world’s richest and economically strongest nation — a position it has held for more than a century since. Nature of imports No, the problem is not with India’s rising imports or the widening balance, per se. The problem is with the nature of the surge in imports and the composition of the trade imbalance. True, unproductive gold imports fell sharply in April — but that is more a factor of the Indian wedding season than a structural change in India’s love for the yellow metal. On the other hand, crude imports shot up substantially, driven by the spike in energy prices caused by the Russia-Ukraine war. A searing hot summer which set in a month early also caused a surge in demand for power, which in turn led to a surge in demand for coal. Imports of crude oil and petroleum products surged more than 81 per cent in April, while coal and coke imports surged nearly 137 per cent. A look at the government’s commodity-wise import numbers for financial year 2021-22 highlights the kind of structural problems with our trade. We have the world’s fifth largest proven reserves of coal — almost a tenth of the world’s supply — yet we imported more than $31.7 billion of coal and coke last year. We are the world’s second largest producer of raw cotton — yet we imported $559.47 million worth of cotton last fiscal. Imports of electronic goods surged more than 35 per cent, past the $73 billion mark, putting it behind crude oil as our biggest import item. We rank second worldwide in farm output — yet agricultural imports are putting a serious dent in our balance sheet. In 2021- 22 we imported $18.9 billion worth of vegetable oil, $2.2 billion of pulses, and a staggering $2.6 billion worth of fruits! Unnecessary imports This is happening because we have been unable to fix the structural issues which dog our key sectors, relying instead on imports for quick fix solutions. Take coal, for instance. It is mind boggling that we are facing a power crisis at the moment because we are unable to import sufficient coal to run our power plants — while sitting on a tenth of the world’s supply! True, there are quality issues — but these could have been fixed with technology upgrades in mining, adding beneficiation infrastructure and tweaking boiler technology to achieve higher thermal efficiencies with lower grade coal. We have the technological capability to do it, but we haven’t done so. Take the criminal $2.6 billion of hard-earned forex we are spending on fruits. India has the widest agro-climatic diversity in the world. Simply put, there is not a single fruit or vegetable that is climatically impossible to produce somewhere in India. Yet, some of the agro-climatically suitable zones for growing exotic and temperate zone fruits — such as the north east and the extended lower Himalayan ranges — are so badly cut off from markets that fruit simply rots on the branch there, rather than being profitably sold in domestic or global markets. We talk up a storm about doubling farmers’ incomes but we actually do nothing about it. Why bother when we can import from “enemy” nation China, and get consumers to pay top dollar for it to boot! Take the much touted success in mobile phone manufacturing. True, made in India handsets have shot up — but for every $100 worth of India-made phones sold, about $80 worth of components are imported. The tale is repeated elsewhere, in virtually every one of our “strong” export sectors. Take textiles, fabrics and apparel. India is ranked second in the world in textiles, behind China. But this distorts the reality. China hogs more than 51 per cent share in global textile output, while India’s is just 6.9 per cent. And despite being one of the world’s biggest producers of both fabric and garments, we imported more than $2 billion worth of textiles and made-ups last year. Neighbouring Bangladesh is the biggest exporter of denim products to the EU and the third biggest — after China and Vietnam — to the US. Even Pakistan exports more denim than India! Our import numbers, in fact, are a very good proxy for the structural weaknesses that plague our economy. Rising imports of crude cannot be helped — it is a resource we lack in sufficient quantity though even here, we have not exploited the resources we have. But everything else points to an inability to address root causes. The failure to address problems known for decades or more is the biggest failure of India’s policymakers and planners. And an indicator of just how much influence over policymaking is exerted by vested interests.

Source: The Hindu Businessline

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PC yarn prices gain up to ₹10/kg in north India's Ludhiana

As many brands shifted from pure cotton to blended garments production, the prices of polyester-cotton (PC) yarn prices increased by ₹4-10 per kg in Ludhiana market of north India. High cotton and cotton yarn prices are compelling big brands and companies to shift to blends, causing their demand to rise. However, polyester spun fibre (PSF) remained stable. PSF raw materials like PTA and MEG recorded a decline in prices. Acrylic yarn prices remained stable, while acrylic fibre prices slipped by ₹3 per kg amid weak demand. A trader told Fibre2Fashion, “PC yarn prices gained up to ₹10 per kg because of improved demand from downstream industry. Garment brands and unbranded manufacturers are shifting to PC yarn because cotton yarn’s record high prices are unbearable for the entire value chain. A trade source said that many companies who were earlier selling 100 per cent cotton garments, have now shifted to production of PC garments. Traders said that final costing of pure cotton garment is not bearable for the end users. They said that it is an unusual trend seen this year about shifting of big brands toward PC garments. Therefore, the consumption of man-made fibre and PSF is increasing gradually. In Ludhiana market, 30 count PC combed yarn (48/52) was sold at ₹300-312 per kg (GST inclusive), according to Fibre2Fashion’s market insight tool TexPro. 30 count PC carded yarn (65/35) was priced at ₹265-275 per kg. 20 count PC (recycled-O/E) PSF yarn (40/60) was traded at ₹195-200 per kg. 30 count poly spun yarn was sold at ₹190-200 and recycled 30 count poly spun yarn at ₹175-185 per kg. Acrylic NM (2/48) was priced at ₹330-340 per kg, while acrylic NM (2/32) was at ₹280-290 per kg. The price of PSF remained unchanged at ₹123 per kg. Reliance Industries Limited (RIL) has fixed prices of raw material as: PTA ₹91.90 per kg (down ₹1.20) and MEG ₹60.80 per kg (down ₹2.30) and MELT at ₹106.20 per kg. Vardhman, Pasupati and other companies decreased the price of acrylic fibre by ₹3 to ₹226 per kg. Global oil benchmark Brent crude futures remained stable at $109.34 per barrel, as per TexPro. In the global market, ZCE cotton yarn May 2022 futures traded higher by CNY 305 at CNY 27,215 per ton and September 2022 traded down by CNY 45 at CNY 27,735 per MT today. ZCE cotton May gained CNY 35 and increased to CNY 21,745 per MT, while September contract traded up by CNY 160 to CNY 21,655 per MT. ICE cotton futures rallied nearly 3 per cent on Monday, boosted by supply concerns due to worsening drought across key growing regions in the US and mill buying. Cotton contracts for July rose by 4.03 cents, or 2.77 per cent, to 149.66 cents per lb. Prices traded within a range of 145 and 150 cents per lb. In north India, cotton prices eased on Wednesday as demand from spinning mills declined at inflated prices. However, drop in prices was limited by weaker arrivals. In Punjab, cotton was quoted from ₹94,200 to ₹96,500 per candy of 356 kg. In Haryana, cotton was priced at ₹91,800 to ₹96,400 per candy. In Upper Rajasthan, cotton was sold at ₹94,800 to ₹97,000 per candy, while it was ₹90,500 to ₹93,400 per candy in Lower Rajasthan.

Source: Fibre2 Fashion

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AJC study suggests ASEAN to participate more in RCEP GVCs

The role of the Association of Southeast Asian Nations (ASEAN) in the Regional Comprehensive Economic Partnership (RCEP) global value chains (GVCs) is smaller than that in ASEAN GVCs and ASEAN connectivity through production is, therefore, also smaller, partly because RCEP is less integrated than ASEAN, according to a study by Tokyo-based ASEAN-Japan Centre (AJC). While ASEAN nations produce many products, they do not necessarily become inputs to exports of non-ASEAN RCEP members’ exports, the study reveals. On a per industry basis, the study shows that while the automotive and electronic GVCs are strong in ASEAN, they are much stronger in RCEP because of the participation of China, Japan and South Korea. Therefore, there are opportunities for ASEAN GVCs in these industries to expand into non-ASEAN RCEP member states. According to the study, ASEAN member states are mainly producers of apparel, which are final product exporters rather than intermediate producers, for example of textiles, which are not much integrated into the next stage of production. ASEAN countries can benefit from the RCEP agreement by expanding their imports of textiles from China. ASEAN agribusiness and tourism are typically regional or domestic market-oriented industries that could penetrate both ASEAN and RCEP markets, an AJC press release said citing the study. The direct impact of RCEP on trade and investment as measured by increases in value is estimated at $42 billion in exports and $900 million in foreign direct investment (FDI) in the current value. These numbers correspond to 1.8 per cent and 0.3 per cent of current exports and FDI flows. To maximise benefits from the RCEP agreement, the study paper identifies five specific policy measures for ASEAN. It suggests creation of an RCEP production network to widen value chains and promote trade and investment; utilisation of existing production programmes and initiatives of RCEP member states, one being Japan’s programme to diversify and multiplicate supply chains in ASEAN to deal with various risks such as COVID-19 that disrupted the supply chains; attracting FDI, especially those that create value chains from non-ASEAN RCEP member states; strengthening relationship with Japan as it is seen to benefit more from the RCEP agreement than ASEAN; and developing parts and components of other RCEP member countries’ exports that are locked into the production lines of various GVCs. The competitiveness of ASEAN exports should be improved to maximise RCEP’s growth opportunities, the paper suggests. AJC promotes awareness of Japanese and ASEAN firms, particularly the micro, small and medium enterprises, regarding the usefulness of the RCEP agreement to their businesses through webinars and dialogues among stakeholders.

Source: Fibre 2 Fashion

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Circular economy: MEPs want to reduce harmful chemicals in waste

Following a on Monday, Parliament on Tuesday adopted its negotiating position for new rules on persistent organic pollutants (POPs), and the management of waste containing them, with 506 votes in favour, 68 against and 49 abstentions. As POPs do not disappear quickly and stay in the environment for a long time, they pose a threat to it and to human health all over the globe. In order to protect the circular lifespan of products, materials containing levels of POPs that are too high must be destroyed or incinerated and cannot be recycled, according to Parliament. While MEPs recognise that the Commission’s proposal is going in the right direction, they want to introduce significantly lower permitted levels of POPs in products. This would align the POPs Regulation better with the EU Green Deal’s goals – especially the ambition for a toxic-free environment and a truly circular economy. Stricter limits for POPs MEPs want to reduce limits on a group of brominated flame retardants from the 500 milligrams per kilogram proposed by the Commission to 200 mg/kg. MEPs also want limits on perfluorooctanoic acid, found for example in waterproof textiles and firefighting foams, to be lowered to 20 mg/kg from the Commission’s proposed 40 mg/kg. MEPs say that the regulation must also cover the synthetic chemical compound perfluorohexanesulfonic acid in order to anticipate them being included in a list of harmful substances by the Stockholm Convention COP-10, scheduled to take place in June 2022. Quote Rapporteur Martin Hojsík (Renew, SK), said: “We cannot tolerate the presence of persistent organic pollutants in materials and waste, otherwise there will be no circular economy in the EU and no sustainable textiles, but an economy of toxic recycled products. Parliament’s position is a step towards cleaning it from POPs such as Per- and Polyfluoroalkyl Substances (PFAS) or dioxines. It will help EU companies to be more sustainable and to ensure citizens can trust in recycled products.” Next steps Parliament is now ready to start negotiations with member states on the final shape of the legislation. Background The Commission presented its proposal to review the Annexes IV and V of the 2019 regulation on POPs on 28 October 2021 to ensure they are aligned with the international obligations, particularly the Stockholm Convention whose main goal is “to protect human health and the environment from persistent organic pollutants”.

Source: Parlamento Europeu

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Turkiye trying to regain share in Saudi Arabia's apparel market

 Turkiye's President Recep Tayyip Erdogan visited Saudi Arabia this week in an attempt to bring normalcy in bilateral diplomatic and trade relations. His visit was preceded by virtual talks between Turkiye’s treasury and finance minister Nureddin Nebati and his Saudi counterpart Mohamed Al-Jadaan, who also exchanged views on trade and areas of investment. Turkiye is a major supplier of garments and textiles to Saudi Arabia. It also imports some garments and textiles from Saudi Arabia. But trade between the two had declined after 2018 due to diplomatic tensions and an undeclared boycott by Saudi Arabia, causing injury to Turkiye’s apparel exports to Saudi Arabia. In 2019, Turkiye exported apparel worth $268.61 million to Saudi Arabia, which decreased by 35 per cent to $172.87 million in 2020. In 2021, the value further dropped by over 90 per cent to $14.42 million, according to data from Fibre2Fashion’s market insight tool TexPro. Though Turkiye’s apparel imports from Saudi Arabia are very negligible, they have also come down drastically. Apparel imports of Turkiye were $1.61 million in 2019, which declined to $1.43 million in 2020. However, Turkiye increased its imports last year to woo Saudi Arabia. As a result, Turkish imports increased by about 70 per cent to $2.45 million in 2021, as per TexPro. During his visit, Erdogan said that both countries are willing to reignite the best economic potential. Turkiye’s exports to Saudi Arabia grew by 25 per cent in the first quarter of the current year amid efforts by the two countries to improve ties.

Source: Fibre 2 Fashion

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